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Exam 4: Completing the Accounting Cycle

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Question 1

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The following contains information from the records of the Becker Architecture Firm. Which of the following statements is an accurate interpretation of the current ratio of the Becker Architecture Firm? (Round your answer to two decimal places. )

A) The company has $2.53 of current assets for every $1.00 of liabilities.
B) The company has $3.00 of current assets for every $1.00 of current liabilities.
C) The company has $1.65 of current assets for every $1.00 of liabilities.
D) The company has $0.62 of current assets for every $1.00 of current liabilities.

E) B) and C)
F) A) and D)

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Question 2

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When a business uses a computerized accounting system,the closing entries must be manually recorded.

A) True
B) False

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Question 3

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The entries that transfer the revenue,expense,and dividends balances to the Retained Earnings account to prepare the company's books for the next period are called ________ entries.

Only permanent accounts appear on the post-closing trial balance.

A balance sheet prepared in the report form lists the assets on the left and the liabilities and stockholders' equity on the right.

Reversing entries are dated on the first day of the new accounting period.

Which of the following is a permanent account?

The Dividends account is included in the income statement section of the worksheet.

Pioneer's adjusted trial balance as of December 31,2018 is given below: Compute the current ratio.(Round your answer to two decimal places. )

The last two columns generally found on the right side of the worksheet are the income statement columns.

At the beginning of the year,the total stockholders' equity of Cutting Edge Technologies,Inc.was $80,000.The revenues and expenses were $70,000 and $30,000,respectively.The company did not declare dividends.No common stock was issued during the year.The total stockholders' equity at the end of the year will amount to $110,000.

In regards to a company using a computerized accounting system,which of the following statements is incorrect?

The Income Summary account shows: a.What does this indicate? b.Prepare the entry to close Income Summary.Omit explanation.

The Accounts Payable account is a temporary account.

Liquidity is a measure of how ________.

If a business has a net loss,the Income Summary T account would hold a debit balance before the account is closed.

To which of the following accounts should the balance in the Income Summary account be closed?

The following is the adjusted trial balance as of December 31,2019 of Brooks Design Studio: Prepare the closing entry for expenses.Omit explanation.

The following is the adjusted trial balance as of December 31,2019 of Wilson Repair Services,Inc. ,after the first year of operations: Prepare the closing entry for the Income Summary account.Omit explanation.

The current ratio measures a company's ________.